Amazon.com reported “tens of millions of people worldwide” signed up for its Prime service. (File photo by THE ASSOCIATED PRESS)

Amazon.com reported “tens of millions of people worldwide” signed up for its Prime service. (File photo by THE ASSOCIATED PRESS)

Amazon’s record holiday shows consumers still have appetite for spending

Amazon.com reported a record-breaking holiday season as shoppers loaded their online baskets with items from Echo speakers to Calvin Klein clothes, suggesting consumer optimism isn’t being deterred by a tumbling stock market.

The internet retailer said “tens of millions of people worldwide” signed up for its Prime service, which offers free two-day shipping on millions of items as well as video and music streaming. In the U.S. alone, more than 1 billion items were shipped for free using Prime, Amazon said in a statement Wednesday.

The U.S. was already headed into a blowout Christmas shopping spree, as Americans are benefiting from higher employment and wages, fueling higher household cash flow. Consumers seemed to be merry despite a S&P 500 Index that has tumbled, a government shutdown that’s entering its fifth day and ongoing trade tensions with China.

Amazon wasn’t the only one benefiting from an insatiable consumer appetite. Mastercard and Visa rebounded after four days of declines. Mastercard said holiday sales increased 5.1 percent to more than $850 billion this year, the strongest growth in the last six years. Online shopping saw gains of 19 percent compared with 2017, according to Mastercard SpendingPulse. Brick-and-mortar retailers also gained. Nike, Macy’s, Kohl’s and PVH were all higher mid-morning in New York.

People bought “millions more” of Amazon’s own devices compared with last year, including the new Echo Dot speaker and the Fire TV Stick, the Seattle-based company said. At the same time, Amazon said more than 50 percent of items sold in its stores came from small and medium-sized businesses.

Among the most popular items under the Christmas tree were the L.O.L. Surprise! Glam Glitter Series doll, Bose Corp. wireless headphones and clothes from Carhartt Inc. Other popular brands bought through Amazon’s Prime Wardrobe service, which allows consumers to fill a box with selected items and return anything that they don’t want, included PVH Corp.’s Calvin Klein, and Hanesbrands Inc.’s Champion.

Amazon started the shopping frenzy out strong, with November’s Cyber Monday already pegged as the company’s biggest shopping day in history. Along with the Christmas sales report, the picture seems much brighter than Amazon had initially projected in its latest earnings results. In October, Amazon’s revenue and profit forecast for the holiday quarter fell short of analysts’ estimates, as investors worried about Amazon’s increased pace of spending.

While Amazon has expanded into almost every area of retail, from pharmaceuticals to groceries, its more profitable units are cloud computing and advertising. Still, Amazon, which dominates e-commerce in the U.S., has relied on the growth of its Prime members, who pay $119 a year for the service. Recent estimates put subscribers at just under 100 million in the U.S. Amazon didn’t give any new numbers for Prime subscribers in its statement Wednesday, but said millions of unique items in the U.S. shipped with Prime.

That kind of volume presents a challenge for logistics services like FedEx Corp. and United Parcel Service Inc. In 2013, a larger than expected surge in last-minute online shopping caught UPS off guard and forced it and Amazon and other retailers to offer refunds to customers who didn’t receive their orders on time for Christmas.

This year, UPS said it expects to deliver an average of more than 31 million parcels a day during the holidays and anticipates a peak-season total of about 800 million packages to rise 5 percent compared with last year’s tally. To deal with the rush of deliveries, the company invested in automation and new facilities to add sorting capacity of 350,000 packages an hour to its U.S. system.

“We’re so far pleased with the operational aspect of it,” said Glenn Zaccara, a spokesman for UPS. “The investments that UPS made in the network, technology, people and planning across the season with our customers obviously paid off.”

The couriers are bracing for a second wave of business as people begin returning gifts in January. UPS expects return packages to hit 1.3 million on Jan. 3. The company said it had 1.5 million returns, its highest for the season, on Dec. 19.

With the S&P teetering on a bear market after a volatile fourth quarter and the worst December in more than a decade, Baird analyst Colin Sebastian lists Amazon as one of the three best picks for investors in the event of a market rebound. Amazon shares have gained about 17 percent this year, compared with an 12 percent decline on the S&P 500.

If Amazon’s Echo speaker was one of its best sellers, it appears to also have been a victim of its own success. Powered by Alexa, the voice-activated software, the smart devices appeared overwhelmed by an onslaught of new users on Christmas, according to reports from the U.K. Owners asking Alexa to play music, turn on the tree lights or recite turkey recipes were often met with the highly unsatisfactory response of: “Sorry, I’m having trouble understanding you right now,” The Guardian reported.

A week before Christmas, several of Amazon’s online stores in North America and Europe sold out of various models of Alexa-powered devices, hinting at the surge in demand.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Lacombe city council rescinded many policies and bylaws on Jan. 25, 2021. (File photo)
Lacombe gets rid of outdated policies and bylaws

Data integrity project underway since 2016

Police have charged two men after they allegedly tried to break into the Bentley post office with a semi. (Photo courtesy of RCMP)
Red Deer men charged in Bentley post office destruction

Police have charged a pair of Red Deer men after an attempted… Continue reading

Red Deer Fire Chief Ken McMullen remains concerned about “inconsistencies” in the province’s new way of dispatching local ambulances. (Advocate file photo).
A few glitches are already noticed in Red Deer’s new ambulance dispatch system

Local fire-medics need more data about ambulance arrival times

Alberta chief medical officer of health Dr. Deena Hinshaw said the province still hopes to bring the hospitalization number down before relaxing restrictions. (photography by Chris Schwarz/Government of Alberta)
14 new deaths, 366 new COVID-19 cases in Alberta

Province nearing 100K COVID-19 vaccine doses administered

Terrance Josephson of the Princeton Posse, at left, and Tyson Conroy of the Summerland Steam clash during a Junior B hockey game at the Summerland Arena in the early spring of 2020. (John Arendt - Summerland Review)
QUIZ: How much do you know about hockey?

Test your knowledge of Canada’s national winter sport

Toronto Maple Leafs goalie Frederik Andersen, left, makes a save on Calgary Flames forward Matthew Tkachuk during second period NHL hockey action in Calgary, Tuesday, Jan. 26, 2021.THE CANADIAN PRESS/Jeff McIntosh
Mitch Marner scores game winner for Maple Leafs in 4-3 win over Flames

Mitch Marner scores game winner for Maple Leafs in 4-3 win over Flames

FILE - In this Oct. 25, 2007, file photo, Boston Red Sox's Curt Schilling pitches against the Colorado Rockies in Game 2 of the baseball World Series at Fenway Park in Boston. Like many baseball writers, C. Trent Rosecrans viewed the Hall of Fame vote as a labor of love. The results of the 2021 vote will be announced Tuesday, Jan. 26, 2021, and Rosecrans was not alone in finding the task particularly agonizing this time around. With Schilling's candidacy now front and center — and Barry Bonds and Roger Clemens still on the ballot as well — voters have had to consider how much a player’s off-field behavior should affect his Hall of Fame chances. (AP Photo/Kathy Willens, File)
Baseball Hall gets no new members; Schilling 16 votes shy

Baseball Hall gets no new members; Schilling 16 votes shy

Prince Edward Island’s Birt is bubble-bound but first wants provincial title

Prince Edward Island’s Birt is bubble-bound but first wants provincial title

Toronto Arrows await word on where they can play, with Plan B going to the U.S.

Toronto Arrows await word on where they can play, with Plan B going to the U.S.

Former CFL player,-coach Brady understands historical significance of NFL promotion

Former CFL player,-coach Brady understands historical significance of NFL promotion

James Hinchcliffe, of Canada, watches during qualifications for the Indianapolis 500 auto race at Indianapolis Motor Speedway, Sunday, Aug. 16, 2020, in Indianapolis. THE CANADIAN PRESS/AP/Darron Cummings
Canadian James Hinchcliffe inks full-time ride with Andretti for 2021 IndyCar season

Canadian James Hinchcliffe inks full-time ride with Andretti for 2021 IndyCar season

Toronto Six down Boston Pride 2-1 for first NWHL victory in franchise history

Toronto Six down Boston Pride 2-1 for first NWHL victory in franchise history

Winnipeg Jets' Andrew Copp (9) celebrates his goal against the Edmonton Oilers during first period NHL action in Winnipeg on Tuesday, Jan. 26, 2021. THE CANADIAN PRESS/Fred Greenslade
Nikolaj Ehlers leads the way, Jets storm back to beat Oilers 6-4

Nikolaj Ehlers leads the way, Jets storm back to beat Oilers 6-4

Most Read